How to Format a Payoff Statement

A payoff statement, or letter of demand, is a document originated by a lender for a borrower who wishes to pay off a loan debt prior to the loan's scheduled amortization date. The letter of demand or payoff statement includes both a complete itemization and explanation of the remaining principle balance, remaining repayment installments, daily interest rate and the amount of interest to be rebated (if any) and early payment penalties (if any are applicable).

Instructions

1

At the top of the statement, provide your full name address, phone number and the same for other co-borrowers or co-signers. Below this information, place the date and subsequently list the name of the financial institution, the loan or account number, the institution's mailing address, phone number and fax number.

2

List the outstanding principal balance, daily interest rate, early payment penalties, and any interest rebate that may be included. Include the date of payoff, thirty days from the date of the letter. (Amounts pertaining to principal balance, daily interest rate, early payment penalties and interest rebate should be inclusive of 30 days from the date of the payoff statement so to accurately compute all amounts.)

3

Include a deadline for receipt of the requested statement that falls within the 30-day window; at the bottom of the document's body, include your full printed name and address, as well as an original signature from each of the requesting parties.

4

Make and keep a copy of the document. Mail the original to the address provided by the financial institution using delivery confirmation or signature confirmation.